Experimental Economics

Experimental economics applies controlled experiments to study decision-making and market mechanisms under varying institutional rules. Originating in the mid-20th century, it brought laboratory and field testing to economic inquiry, complementing theory with empirical observation. By recruiting participants to make real choices with real stakes, researchers manipulate environmental factors—such as pricing rules, information structures and payoff schemes—to isolate causal influences on behaviour. Classic laboratory setups employ randomised assignment to treatment and control groups, strict anonymity, financial incentives calibrated to performance and repeated interactions to examine convergence to equilibrium. Field experiments extend this logic to natural settings, embedding interventions in consumer, energy or transport markets to test policy innovations at scale. Together, these methods illuminate departures from classical rational-actor models, revealing how framing, defaults, social preferences and bounded rationality shape savings, investment, cooperation and market dynamics. Beyond testing standard models of supply, demand and auctions, experimental economics underpins behavioural interventions—nudges—in public policy, supports the design of trading platforms and informs global efforts to promote green technologies, inclusive finance and efficient resource allocation. Its iterative interplay with theory has deepened understanding of human motivations, improved institutional design and provided actionable insights for governments and businesses worldwide.

Research from Nature Portfolio

Recent studies have demonstrated the power of message framing to accelerate investment in clean energy. In one large-scale trial, tailored financial-savings messages led to a 40 percent rise in customer commitments to solar-panel installation, outpacing environment-focused appeals and confirming the scalability of framing interventions in the energy transition. In another experiment, an auction-based valuation of augmentative exoskeleton assistance revealed how users trade off performance gains against device weight. By analysing second-price bids under different walking conditions, researchers quantified the net willingness to pay for mechanical support, offering a novel laboratory approach to guide the design and pricing of wearable robotics.

Experimental Economics publication trend

The graph below shows the total number of articles in experimental economics across all publications each year (not limited to Nature Index journals).

Technical terms

Lab experiment: A controlled study in which participants make real decisions under prescribed rules and receive payoffs linked to performance.

Field experiment: An intervention deployed in a natural setting, randomising subjects or locations to test causal impacts in situ.

Randomised assignment: A procedure that allocates participants to treatment or control groups at chance, ensuring comparable groups for causal inference.

Nudge: A subtle redesign of the choice environment or presentation that steers behaviour without restricting freedom of choice.

Default: A pre-set option that takes effect if an individual does not make an active choice, used to shape outcomes via inertia.

Second-price auction: A bidding mechanism where the highest bidder wins but pays the amount of the second-highest bid, incentivising truthful valuation.

References

1. Extending the theory of planned behavior to predict and nudge toward the subscription to a public transport ticket. European Transport Research Review (2022).
2. Message framing to promote solar panels. Nature Communications (2023).
3. When and why defaults influence decisions: a meta-analysis of default effects. Behavioural Public Policy (2019).
4. Agentic preferences: a foundation for nudging when preferences are endogenous. Behavioural Public Policy (2022).
5. The economic value of augmentative exoskeletons and their assistance. Communications Engineering (2023).